Actor Hugh Grant, who helped expose the News of the World phone hacking scandal, says that not only did the British tabloids pay off the police to gather people's personal information, but that the British government did nothing to stop it.

"Tabloids are using private detectives who are using illegal techniques, and it's very widespread," Grant said. "And the government did nothing -- absolutely nothing -- because of their terror of the press. They did not want to upset the tabloid press, who they were, at that stage, still enthralled in."

The scandal -- involving News of the World, a British tabloid owned by News Corporation CEO Rupert Murdoch, and an epidemic of alleged criminal activity that includes hacking the voicemails of murder victims -- has rocked Britain to the core since erupting publicly last week.

Even more shocking, the affair places the power network of Murdoch, successive British governments and the police at the center of the firestorm. All of them are accused of suppressing the truth.

Grant said evidence of British tabloids hacking into people's personal information has been around for years but that British government officials, including five successive prime ministers, tried to cover it up for fear of being smeared in one of Murdoch's papers.

"That's been one of the most shocking aspects of all this: You know, our politicians have been craven cowards in the face of Murdoch's terror," he said. "This was a country that was effectively ruled by Rupert Murdoch, and right now in Parliament they're pretty much telling him to get out of the country."

The actor said he has long had "paranoid moments" concerning the tabloid press because "photographers would pop up out of nowhere." But he couldn't confirm his suspicions that the press might be tracking him illegally until about five years ago. That's when, Grant said, police showed up at his door and told him they had arrested a private investigator who had Grant's personal information, including phone numbers, PIN numbers and bank account details.

"I said, 'Why has he got them? Who is he working for?' And they said, 'It looks from his records like he's working for most of the British press,'" Grant said. "That was the most chilling moment. ... There [were] details about my friends, family, their phone numbers, what I was getting up to. So that's not an allegation. That's the truth."

Actor Hugh Grant with ABC's Jeffrey Kofman.Credit: ABC News

Grant played a part in exposing the scandal. The actor spoke of an incident when his car broke down on the side of a road in Kent, England, and a former News of the World features editor, Paul McMullan, came upon him and started taking photos.

"He starts boasting about the fact that he used to work at the NOTW," Grant said. "And he gives me everything about how they used to hack my phone, how phone hacking, contrary to opinion at that time -- this was earlier this year -- wasn't a small, isolated incident but was massive on an industrial scale, not only at NOTW but throughout the tabloid press in Britain, and how close their relationships were with the police, how close their relationships were with the government. Lots of horrifying stuff."

Hugh Grant Describes When He Got Paul McMullan to Confirm the British Tabloid's Tactics

Three months later, Grant said, he decided to stop by McMullan's pub in Dover, England, while wearing a recording device, and he got McMullan to confirm the paper's tactics. Grant then published his recordings in the British magazine, New Statesman.

According to Grant, McMullan said he "thought they probably had hacked the messages of the family and friends of little girls murdered in a place called Soham in England, and the Milly Dowler case," Grant said.

Despite the scandal, Grant said he still believes in a system that allows freedom of the press.

"My main motive in all this has been to just bring it out into the public and to let people know that there's this scam going on," he said.

Earlier today, U.K. Prime Minister David Cameron announced that a criminal investigation is underway and investigators are reviewing 11,000 pages of documents containing nearly 4,000 names and thousands of phone numbers. About 180 people whose identities were found in the documents have been notified, so far.

If News Corp. International is found criminally liable, Cameron said, the organization would have "no further role in the media in our country."

News Corp. was also in negotiations to take over the British Sky Broadcasting (BSkyB) satellite network, but has now withdrawn its $12 billion bid, saying that "It is too difficult to progress in this climate."

"They should stop thinking about mergers until they sort out the mess they've created," Cameron told a packed House of Commons. "There needs to be root-and-branch change at this entire organization."

Murdoch has been in London since Sunday to try to contain the crisis. The News of the World wasn't just another paper in Murdoch's portfolio; it was the best-selling and most-profitable Sunday paper in Britain.

James Murdoch, Rupert Murdoch's son and heir, announced last week that the newspaper would print its last issue on July 10 after 168 years of being in print, leaving its 270-person staff without jobs.

"We praised high standards, we demanded high standards but, as we are now only too painfully aware, for a period of a few years up to 2006 some who worked for us, or in our name, fell shamefully short of those standards," the paper said in a full-page editorial. "Quite simply, we lost our way. Phones were hacked, and for that this newspaper is truly sorry."

The scandal has been simmering in Britain for months, but it exploded last week, when it was alleged that News of the World hacked the cell phone of Milly Dowler, a 13-year-old girl who disappeared in March 2002. Reports suggested a News of the World employee not only listened to the teenager's voicemail, but deleted voicemail messages hoping to leave space for more -- leading her parents to believe she was still alive. Her remains were found southwest of London six months later, and a man was convicted this spring of killing her.

"My life's not horrible," Hugh Grant said. "I've had some success. People spoil me and flatter me. The people who really suffer are people who are not in the public eye -- just innocent or have, perhaps, been involved in some tragedy."